British Charities Need To Do More To Prevent Fraud

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In 2019 more than 3,000 charities participated in a research project seeking to obtain data on fraud awareness, cyber security and resilience. The results of the study indicate many charitable organisations have not deployed enough basic security to ensure they are protected. More than two thirds of participating organisations say they think the major risk to the charity sector with insider fraud conceived of as being the biggest threat.

Cyber-crime the biggest threat

More than half of all charities polled say that cyber-crimes are the biggest threat with 30 per cent of all cyber-crimes identified by internal IT checks and balances. The study results also suggest that charitable organisations are not aware of just how vulnerable they are and need to enact basic checks and balances to ensure they are protected. More than a third of charitable organisations think they are not vulnerable to any of the most common types of fraud perpetrated on charities.

Need to implement best-practices

More than half of all charities who have been the victim of fraud in the last couple of years knew the perpetrator. A whopping 85 per cent of all charities believe they are doing everything within their power to prevent fraud, but more than half of charities do not have best-practices in place. Only 29 per cent reported they were the victim of cyber-crimes to the police. The gap between awareness and action is a real threat to the valuable funds these charities face.

Simple and basic steps

There are a few simple steps that all charities can take to protect themselves. The most important is to introduce and enforce basic financial controls. An example of this is having at least two signatories for bank accounts, cheques and undertaking other banking work. Charities should make sure that no single individual has complete oversight or control of financial arrangements. The best way to achieve that is to segregate duties. Charities should encourage staff, volunteers and trustees to raise their voices when they come across any activity they do not feel comfortable with.